By Jennifer Waters
A DOW JONES COLUMN
Credit-credit companies and retailers are trying to entice
consumers to break out the plastic this holiday shopping season by
offering them "gifts" of their own.
Fearing consumers might stick to cash, card issuers are rolling
out extra points, deeper discounts, free gift cards and even cash
for shoppers who pay with their credit and debit cards. And
retailers are adding their own bounties through their own
credit-card and loyalty programs.
"Some card issuers are seeing this as an opportunity to change
the game and engage their customers further," says Kelly Hlavinka,
managing partner at Colloquy, a loyalty marketing research firm in
Fort Lauderdale, Fla.
Toy retailer Toys "R" Us, for instance, is hoping to win
price-war battles against Wal-Mart Stores Inc. (WMT) and Target
Corp. (TGT) by tripling its rewards dollars to 10% on purchases
made in stores or online.
Though holiday retail sales are expected to rise this year,
they're doing so off a meager 0.4% increase last year, according to
the National Retail Federation.
Consumers are still worried about their finances and
unemployment and are making holiday gift lists and sticking closely
to them, according to a survey of more than 8,700 consumers
conducted earlier this month by BIGresearch for the National Retail
Federation. What's more, only 27.6% of consumers say they will use
a credit card this season, the lowest number since 2002, according
to the survey.
Bonus Points
Here are some of the perks being touted.
- Each time consumers make a purchase with a Citigroup Inc. (C)
Citi card through Dec. 31, they will be entered to win a prepaid
credit card valued at $10 to $10,000. (Cardholders must register
their cards with Citi's online holiday sweepstakes to be
eligible.)
- Discover cardholders earn double cash-back bonuses, or 2%, on
purchases of up to $1,000 made online through Dec. 31. Purchases
after the $1,000 limit earn the usual 1% cash-back bonus.
Cardholders can earn 5% cash back on up to $300 in purchases made
at restaurants, department stores and clothing stores through Dec.
31. Discover also is allowing cardholders to redeem rewards points
for things like tickets to the 2011 Discover Orange Bowl on Jan. 3
in Miami.
- J.P. Morgan Chase & Co. (JPM) is adding discounts for
redemptions and more opportunities to earn points through its
Ultimate Rewards program. Through Dec. 20, cardholders who redeem
5,000 rewards points or more for merchandise in a single
transaction receive a $10 Best Buy gift card; they get a $25 gift
card if 10,000 points are redeemed. If consumers use reward points
to shop online on Cyber Monday, on ultimaterewards.com, they'll
save 30%. And people who make purchases on the site through Nov. 30
will earn eight bonus points for every dollar spent.
- Wells Fargo & Co. (WFC) has stepped up the deals at its
online mall, wellsfargorewards.com. Holders of Wells Fargo credit
and debit cards earn up to 16 points for every dollar spent at more
than 600 brand-name merchants through Dec. 31.
- Target stepped up its regular rewards program ahead of the
holidays by giving REDcard customers a 5% discount on all purchases
made online or in stores with a Target credit or debit card or a
Target Visa card.
- Even the travel industry is getting in on holiday giveaways.
Expedia Inc. (EXPE) is offering a $200 travel coupon, redeemable
early next year, if you book a flight by Dec. 20 for travel by Jan.
3.
- AirTran Airways launched "The More the Merrier" promotion for
its A+ Rewards frequent fliers to earn extra credit for themselves
and for up to three members of a traveling party on flights
originating out of Atlanta. A party of four flying round trip can
earn six credit points each. Two round-trip flights during the
promotion will get you a free one-way flight, originating from
Atlanta.
Keep in mind that many of these rewards may have usage deadlines
or restricted eligibility. AirTran's promotion, for instance,
requires members of its frequent-flier program to register for the
promotion before the flight departs.
The Toys "R" Us loyalty program has a $50 limit on the rewards
and requires that the dollars be spent at Toys "R" Us or Babies "R"
Us stores between Dec. 26 and Jan. 31. The Toys "R" Us program is
"very rich," Hlavinka said, "but when you sit down and do the math,
will you have money to spend on toys in January?"
(Jennifer Waters is a writer for MarketWatch. She can be reached
at 415-439-6400 or via email at AskNewswires@dowjones.com.)